In a report released today, Aravinda Galappatthige from Canaccord Genuity maintained a Buy rating on Cineplex (CPXGF – Research Report), with a price target of C$14.00.
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Aravinda Galappatthige’s rating is based on a combination of factors that indicate a positive future for Cineplex. Despite a slight underperformance in Q4 2024, with attendance and adjusted EBITDA falling short of expectations due to higher costs and lower revenues in some areas, the overall investment profile remains strong. The outlook for late 2025 and 2026 is promising, with a robust film lineup anticipated to drive significant growth, potentially elevating revenue towards pre-pandemic levels.
Furthermore, Cineplex’s financial leverage is projected to improve, reducing the net debt to EBITDA ratio to 2.6x by the end of 2025, which could pave the way for enhanced shareholder returns through dividends or share buybacks. Additionally, the company’s continued innovation in concession sales and strong performance in digital media add to its attractiveness. These factors, combined with a favorable market position and strategic initiatives, underpin the Buy rating given by the analyst.